Why China's Economy and ETFs Could Outpace Others | ETF Trends

Like all countries, China is having some difficulties reshaping its economic engine. But unlike most countries, China’s economy, and related exchange traded funds (ETFs), may have the potential to outstrip others.

China’s State Council recently stated that falling exports and profits, industrial over-capacity and rising unemployment is still hindering the Chinese economy, reports Li Yanping for Bloomberg. China’s GDP grew 6.1% in the first quarter year-over-year.

The Central Bank has kept interest rates at a four-year low to support credit for the Chinese stimulus package, which has accelerated investments, increased industrial output and revived market confidence.

The China Policy Institute of University of Nottingham estimates that China may overtake Japan to become the world’s second largest economy by 2010, remarks Robert Hsu for InvestorPlace Asia.

The Institute expects the United States, United Kingdom, Japanese and German economies to further lull in the doldrums until 2010 as China’s economy continues to expand at around 7% this year.

  • iShares FTSE/Xinhua China 25 Index (FXI): up 28% year-to-date